Required Minimum Distribution Modernization Act of 2020
This bill revises rules requiring mandatory minimum distributions from tax-exempt retirement plans. Specifically, it increases from 72 to 75 the age at which plan participants must being making distributions from their accounts. It also exempts defined contribution plans from mandatory distribution requirements if the aggregate value of an employee's entire interest in all such plans does not exceed $100,000.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8567 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 8567
To amend the Internal Revenue Code of 1986 to increase to 75 the
required beginning date age for mandatory retirement distributions and
to exempt from such distribution rules individuals with lower account
balances.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 9, 2020
Mrs. Murphy of Florida (for herself and Mr. Estes) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to increase to 75 the
required beginning date age for mandatory retirement distributions and
to exempt from such distribution rules individuals with lower account
balances.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Required Minimum Distribution
Modernization Act of 2020''.
SEC. 2. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY
DISTRIBUTIONS.
(a) In General.--Section 401(a)(9)(C)(i)(I) of the Internal Revenue
Code of 1986 is amended by striking ``age 72'' and inserting ``age
75''.
(b) Spouse Beneficiaries; Special Rule for Owners.--Subparagraphs
(B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each
amended by striking ``age 72'' and inserting ``age 75''.
(c) Conforming Amendments.--The last sentence of section 408(b) of
such Code is amended by striking ``age 72'' and inserting ``age 75''.
(d) Effective Date.--The amendments made by this section shall
apply to distributions required to be made after December 31, 2020,
with respect to individuals who attain age 72 after such date.
SEC. 3. EXEMPTION FROM REQUIRED MINIMUM DISTRIBUTION RULES FOR
INDIVIDUALS WITH CERTAIN ACCOUNT BALANCES.
(a) In General.--Section 401(a)(9) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(J) Exception from required minimum distributions
during life of employee where assets do not exceed
$100,000.--
``(i) In general.--If, as of a measurement
date, the aggregate value of an employee's
entire interest under all defined contribution
plans does not exceed $100,000, then, during
any succeeding calendar year beginning before
the next measurement date, the requirements of
subparagraph (A) shall not apply with respect
to such employee.
``(ii) Defined contribution plan.--For
purposes of this subparagraph, the term
`defined contribution plan' has the same
meaning as when used in subparagraph (H).
``(iii) Limit on required minimum
distribution.--The required minimum
distribution determined under subparagraph (A)
for an employee under all defined contribution
plans shall not exceed an amount equal to the
excess of--
``(I) the aggregate value of an
employee's entire interest under such
plans on the last day of the calendar
year to which such distribution
relates, over
``(II) the dollar amount in effect
under clause (i) for such calendar
year.
The Secretary in regulations or other guidance
may provide how such amount shall be
distributed in the case of an individual with
more than one defined contribution plan.
``(iv) Measurement date.--For purposes of
this subparagraph, the term `measurement date'
means, with respect to any employee--
``(I) the last day of the calendar
year preceding the calendar year in
which the employee attains age 75, and
``(II) in the case of any employee
who (after a measurement date
determined under subclause (I) with
respect to such employee) receives
contributions, rollovers, or transfers
of amounts that were not previously
taken into account in applying this
subparagraph, the last day of the
calendar year in which such
contribution, rollover, or transfer was
so received.
``(v) Inflation adjustment.--In the case of
any calendar year beginning after 2020, the
$100,000 amount in clause (i) shall be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost of living
adjustment determined under section
1(f)(3) for the calendar year,
determined by substituting `calendar
year 2019' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any increase determined under this clause shall
be rounded to the next lowest multiple of
$5,000.
``(vi) Plan administrator reliance on
employee certification.--A defined contribution
plan described in clause (iii), (iv), (v), or
(vi) of section 402(c)(8)(B) shall not be
treated as failing to meet the requirements of
this paragraph in the case of any failure to
make a required minimum distribution for a
calendar year if--
``(I) the aggregate value of an
employee's entire interest under all
defined contribution plans of the
employer on the last day of the
calendar year to which such
distribution relates does not exceed
the dollar amount in effect for such
year under clause (i), and
``(II) the employee certifies that
the aggregate value of the employee's
entire interest under all defined
contribution plans on the most recent
measurement date with respect to the
employee (as determined by the employee
based on guidance provided by the
Secretary) did not exceed the dollar
amount in effect for such year under
clause (i).
``(vii) Aggregation rule.--All employers
treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 shall be
treated as a single employer for purposes of
clause (v).''.
(b) Plan Administrator Reporting.--Section 6047 of such Code is
amended by redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) Account Balance for Participants Who Have Attained Age 74.--
``(1) In general.--Not later than January 31 of each year,
the plan administrator (as defined in section 414(g)) of each
defined contribution plan (as defined in section 401(a)(9)(J))
shall make a return to the Secretary with respect to each
participant of such plan who has attained age 74 as of the end
of the preceding calendar year which states--
``(A) the name and plan number of the plan,
``(B) the name and address of the plan
administrator,
``(C) the name, address, and taxpayer
identification number of the participant, and
``(D) the account balance of such participant as of
the end of the preceding calendar year.
``(2) Statement furnished to participant.--Every person
required to make a return under paragraph (1) with respect to a
participant shall furnish a copy of such return to such
participant.
``(3) Application to individual retirement plans and
annuities.--In the case of an defined contribution plan
described in clause (i) or (ii) of section 402(c)(8)(B)--
``(A) any reference in this subsection to the plan
administrator shall be treated as a reference to the
trustee or issuer, as the case may be, and
``(B) any reference in this subsection to the
participant shall be treated as a reference to the
individual for whom such account or annuity is
maintained.''.
(c) Effective Date.--The amendments made by this section shall
apply to distributions required to be made in calendar years beginning
more than 120 days after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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